On 24 January 2020, HM Revenue and Customs (HMRC) and HM Treasury (HMT) published the anticipated technical consultation on the expansion of the trust registration service to cover all express trusts in order to implement the EU Fifth Anti-Money Laundering Directive (AMLD5). Appended to the consultation document are the proposed draft regulations for the expanded registration requirement. The technical consultation promises a proportionate approach by government to the registration requirement and an intention to keep out of scope trusts which present a low risk of being manipulated for money laundering and terrorist financing purposes (low AML risk).
However, the draft regulations do not fully realise this ambition. Given the ubiquity of trusts in English law, this risks creating considerable commercial disruption and even undermining the purpose of the regulations. Clifford Chance has therefore submitted a response to the consultation informed by our practical experience of trusts across a wide range of commercial transactions. We highlight below some of the key themes in our response.